ROB'S PICK

I’ve been collaborating with the Social Finance Institute to develop the Impact-First Investing (IFI) Tool, a free, interactive resource designed to help philanthropists explore how impact-first investments could fit within their broader charitable capital strategy. Created for foundations, donor-advised fund account holders, family offices, and other mission-driven investors, the IFI Tool allows users to model how different allocations of grants, market-rate investments, and impact-first investments may affect projected social impact and financial returns over time.

For many philanthropists, their charitable capital sits in traditional market-rate accounts and flows out as one-time grants. Both traditional investments and traditional giving have their place, but many high-potential solutions fall between those categories. Impact-first investing offers one answer, providing patient, flexible capital that prioritizes impact over return, with the possibility of repayment over time. The IFI Tool offers a concrete way to model trade-offs that are often implicit, allowing users to better understand the implications of different assumptions about returns, impact, and duration. The model and supplemental case studies enable users to explore the potential value of adding IFIs to their portfolios.

Robert Gertner is the Frank P. and Marianne R. Diassi Distinguished Service Professor of Economics and Strategy and John Edwardson Faculty Director Rustandy Center for Social Sector Innovation.